Board's Explanation on Compliance with Article 4 of the Guidelines for Major Asset Restructuring
Tianshui Huati Technology Co., Ltd. (hereinafter referred to as "the Company" or "the Listed Company") intends to acquire 100% of the shares of Huayi Microelectronics Co., Ltd. (hereinafter referred to as "the Target Company") held by 27 counterparties, including Tianshui Huati Electronics Group Co., Ltd., Xi'an Houyi Investment Management Partnership (Limited Partnership), and Xi'an Xintian Yubo Enterprise Management Partnership (Limited Partnership), through the issuance of shares and cash payments, and to raise supporting funds (hereinafter referred to as "this transaction"). After careful analysis, the board believes that this transaction complies with Article 4 of the "Guidelines for Major Asset Restructuring of Listed Companies." The specific circumstances are as follows: